Ansonia Associates v. Ansonia Residents' Ass'n

• Decision Date: 30 December 1980
• Citation: 78 A.D.2d 211,434 N.Y.S.2d 370
• Parties: ANSONIA ASSOCIATES, Plaintiff-Respondent, v. ANSONIA RESIDENTS' ASSOCIATION, Harry Garland, Selma Cohen, Virginia Gerhard, David Montefiore, Mildred Cato, Leon Warner, Mary Ludington, Jerry Forderhase, Jerry Mann, Denis Berigan, Ellen Rust, Win Sochet, and Dan Anderson, Individually and as Representatives of a Class of Tenants and Residents of the Ansonia Hotel and John Does and Mary Roes, the names "John Does" and "Mary Roes" being Fictitious and Intended to Designate Party or Parties as yet unknown acting in concert with the Foregoing Defendants, Defendants-Appellants, and Bank "X", the name of the bank being fictitious and to designate the bank where defendants have deposited rents received from the Ansonia Hotel's tenants and residents. ANSONIA ASSOCIATES, Plaintiff-Appellant, v. ANSONIA RESIDENTS' ASSOCIATION, Harry Garland, Selma Cohen, Virginia Gerhard, David Montefiore, Mildred Cato, Leon Warner, Mary Ludington, Jerry Forderhase, Jerry Mann, Denis Berigan, Ellen Rust, Win Sochet, and Dan Anderson, Individually and as Representatives of a Class of Tenants and Residents of the Ansonia Hotel and John Does and Mary Roes, the names "John Does" and "Mary Roes" being Fictitious and Intended to Designate Party or Parties as yet unknown acting in concert with the Foregoing Defendants, Defendants-Respondents, and Bank "X", the name of the bank being fictitious and to designate the bank where defendants have deposited rents received from the Ansonia Hotel's tenants and residents, Defendant.
• Court: New York Supreme Court — Appellate Division

Page 370

434 N.Y.S.2d 370

78 A.D.2d 211

ANSONIA ASSOCIATES, Plaintiff-Respondent, v. ANSONIA RESIDENTS' ASSOCIATION, Harry Garland, Selma Cohen, Virginia Gerhard, David Montefiore, Mildred Cato, Leon

Warner, Mary Ludington, Jerry Forderhase, Jerry Mann, Denis

Berigan, Ellen Rust, Win Sochet, and Dan Anderson,

Individually and as Representatives of a Class of Tenants

and Residents of the Ansonia Hotel and John Does and Mary

Roes, the names "John Does" and "Mary Roes" being Fictitious

and Intended to Designate Party or Parties as yet unknown

acting in concert with the Foregoing Defendants, Defendants-Appellants,

and

Bank "X", the name of the bank being fictitious and to

designate the bank where defendants have deposited

rents received from the Ansonia Hotel's

tenants and residents.

ANSONIA ASSOCIATES, Plaintiff-Appellant, v. ANSONIA RESIDENTS' ASSOCIATION, Harry Garland, Selma Cohen, Virginia Gerhard, David Montefiore, Mildred Cato, Leon

Warner, Mary Ludington, Jerry Forderhase, Jerry Mann, Denis

Berigan, Ellen Rust, Win Sochet, and Dan Anderson,

Individually and as Representatives of a Class of Tenants

and Residents of the Ansonia Hotel and John Does and Mary

Roes, the names "John Does" and "Mary Roes" being Fictitious

and Intended to Designate Party or Parties as yet unknown

acting in concert with the Foregoing Defendants,

Defendants-Respondents,

and

Bank "X", the name of the bank being fictitious and to

designate the bank where defendants have deposited

rents received from the Ansonia Hotel's

tenants and residents, Defendant.

Supreme Court, Appellate Division, First Department.

Dec. 30, 1980.

Edward Heller, New York City, of counsel (Heller & Peck, New York City, attorneys), for defendants-appellants in Appeal No. 8950N and for defendants-respondents in Appeal No. 8951.

Ralph L. Ellis, New York City, of counsel (Charles E. Simpson, New York City, with him on the brief; Shea & Gould, New York City, attorneys), for plaintiff-respondent in Appeal No. 8950N and for plaintiff-appellant in Appeal No. 8951.

Before KUPFERMAN, J. P., and BIRNS, FEIN, SANDLER and CARRO, JJ.

FEIN, Justice.

Plaintiff-landlord appeals dismissal of its complaint which sought to enjoin permanently defendant tenants' association and certain tenants in individual and representative capacities from collecting and retaining rent owed to plaintiff. Also under review on this consolidated appeal is a challenge by these defendants to the granting of a preliminary injunction restraining the collection of such rent and directing a turnover to the landlord of the rents already collected.

Plaintiff purchased the old Ansonia Hotel in June 1978, after the previous owner had allowed the premises to deteriorate in the face of continued repair orders and fines levied by the Conciliation and Appeals Board (CAB). Plaintiff then embarked upon an extensive program to upgrade the hotel, expending in excess of 1.7 million dollars for improvements. An application was then made to the CAB for reinstatement of rent guideline increases on those apartments where defects had been cured. This application was granted after CAB inspection of the premises, rent guideline increases to be reinstated for certain specified apartments as of February 15, 1980. ^* A number of the tenants so affected felt there were still too many defects in the premises to warrant rent increases. They were joined in this view by defendant tenants' association, which exhorted tenants to engage in a rent strike by paying their rent into an escrow fund maintained by the association at the local bank.

Plaintiff brought this action against the tenants association and against certain tenants in their individual and representative capacities to enjoin them from collecting and withholding rent, to stop the inducement to breach obligations to pay rent, and to account for and pay over rentals so collected and withheld. The depository bank, not a party to this appeal, was also joined anonymously in this action. Defendants' answer asserted breach of warranty of habitability, failure to state a cause of action, and an adequate, indeed exclusive, remedy in Civil Court, Housing Part, under Civil Court Act § 110.

Plaintiff's motion for a preliminary injunction was granted to the extent of restraining the continued solicitation, collection and withholding of rental payments and directing that all rents collected be paid to and turned over to plaintiff. Special Term found irreparable harm in the diversion of monies needed by the landlord in order to provide essential and contractual services. Special Term rejected defendants' contentions that summary proceedings provided an adequate remedy at law, and that plaintiff was financially able to withstand the shutoff of this income in the face of operating debts and obligations. Special Term directed an immediate trial.

After an unsuccessful defense motion at Special Term for summary judgment on the eve of trial, the trial commenced before Justice Gammerman. At the conclusion of plaintiff's case, Trial Term granted the motion of the tenants and their association to dismiss. The trial justice vacated the preliminary injunction issued by Special Term. Justice Gammerman properly ruled that law of the case did not bind him to follow Special Term's lead in granting a preliminary injunction (see Gambar Enterprises v. Kelly Services, 69 A.D.2d 297, 418 N.Y.S.2d 818). The purpose of a temporary injunction is merely to maintain the status quo pendente lite (Tucker v. Toia, 54 A.D.2d 322, 388 N.Y.S.2d 475; Bond Stores v. Turner, 262 App.Div. 417, 419, 29 N.Y.S.2d 82). However, the trial justice went on to rule that plaintiff had an adequate remedy at law in Housing Court, that plaintiff had not demonstrated irreparable harm, that plaintiff had not proven tortious interference on the part of defendant tenants' association, and that there was an identity between the association and its member tenants.

Trial Term erred for a number of reasons in finding that landlord had an adequate remedy at law in Housing Court to recover the rents collected by the association. Landlord had no remedy in Housing Court against the tenants' association. In this respect there was plainly no identity between the association and its member tenants. Landlord and the association did not stand in the relationship of landlord and tenant, so there was no jurisdiction in the Housing Court. Landlord would have to bring 300 to 350 eviction proceedings against the respective tenants. If successful, landlord's remedies would be against the individual tenants to enforce any Housing Court judgment. Its sole remedy against the tenants' association would be by way of proceedings to enforce any money judgments obtained against any or all of the tenants. The proceedings would have to be against the tenants' association, an unincorporated association which could sue or be sued as a separate entity. This is plainly not an adequate remedy at law.

The notion that 300 to 350 separate eviction proceedings in the Housing Court would provide an adequate remedy at law as compared with the one action pending in Supreme Court before the trial justice was erroneous for an even more fundamental reason. Whether there is an adequate remedy at law is determinative of the issue of the right to equitable relief or the need for it instead of a money judgment. If adequate relief can be obtained by a money judgment there is no need for equitable relief. This has nothing to do with the court in which the action is brought. The remedy at law was available on the trial in Supreme Court in this very action, now subject of this appeal. The fact that landlord sought equitable relief in the form of a mandatory injunction directing a turnover of the rent moneys collected by the association is not dispositive. A mandatory injunction is not a proper remedy under the circumstances precisely for the reason that a money judgment would suffice with respect to the rent moneys already collected. Landlord made a prima facie showing of entitlement to a money judgment on the trial.

The record does not support landlord's allegations that it is entitled to a mandatory injunction founded upon its alleged cause of action for inducement to breach a contract because of the tenants' association's efforts in collecting the rent. There is no cause of action for inducement since it appears that the association is tenants' vehicle. This is not to say that the association and the individual tenants do not have separate legal identities. However, such separate identity does not warrant a mandatory injunction where a money judgment is available.

Trial Term overlooked or disregarded the fact that plaintiff had established a prima facie case entitling it to a money judgment in the absence of proof that the tenants had a defense by way of breach of warranty of habitability or other legal reason for non payment of rent. Plaintiff proved that (1) the rent had not been paid to it, and (2) the rent had been collected and was being held by the tenants' association. This was undisputed. Indeed it was proved out of the mouth of the president of the tenants' association and the association's records. The tenants' association had no ownership or other right or title superior to that of the landlord to the moneys it had collected. Its sole purpose was to prevent landlord's collection of rent. As representative of the tenants, the association had asserted,

"By paying this rent into a special account controlled by the tenants, we protect tenants from eviction, harassment and economic hardship."

Plainly the association escrow fund was rent money to which plaintiff was entitled unless tenants proved otherwise. Tenants were before the court through their association and some appeared individually and in a representative capacity. Plaintiff asserted it was in part bringing a class action against the tenants through their representatives named in the action, apparently...